Insurance is a legal agreement between two parties – the insurer and the insured The insurer provides financial coverage for the losses of the insured that s/he may bear under certain circumstances.
Insurance coverage can be defined as a contract in the form of a financial protection policy. This policy covers the monetary risks of an individual due to unpredictable contingencies. The insurers provide financial coverage or reimbursement in many cases to the policyholder.
The policyholder pays a certain amount called ‘premium’ to the insurance company against which the latter provides insurance cover. Premium payment decides the assured sum for insurance coverage or ‘policy limit’.
